TDS Simplified

Versoll Books automates Tax Deducted at Source (TDS) so that every qualifying purchase, expense, or contractor payment applies the right deduction. Use this guide to configure sections, calculate deductions, and generate compliance-ready reports.

What you'll learn

Setting up TDS sections, applying rates to suppliers, calculating deductions on bills, and tracking payable balances for filing.

Configure TDS Foundations

TDS rules are driven by sections and categories. Start with the statutory section, then link it to a category and default accounts.

Step 1

Create TDS Sections

Go to Settings > Tax Withholding and add sections such as 194C, 194J, or 194I. Each section requires:

  • Rate: Default deduction percentage.
  • Threshold: Minimum annual amount before TDS applies.
  • Higher Rate (No PAN): Applied when PAN is missing.
Step 2

Link TDS Categories

Under TDS Categories, group sections based on vendor type (Contractor, Professional Services, Rent). Select a default payable account for each category.

  • Connects suppliers to the right deduction logic.
  • Ensures the correct TDS payable ledger is used.

Apply TDS to Suppliers

Once categories exist, update your supplier master so every bill applies the correct TDS rate automatically.

Step 3

Assign TDS Category on Supplier

Edit a supplier and set:

  • TDS Category: Contractor, Professional Services, Rent.
  • PAN: Required to avoid higher TDS.
  • Default Expense Account: Keeps booking consistent.

Missing PAN automatically triggers the higher TDS rate configured in the section.

Deduction Workflow on Purchase Bills

TDS is applied at the time of bill entry. The system reduces the payable amount and records the deduction as a separate liability.

Step 4

Record a TDS-Applicable Bill

Create a purchase invoice for a supplier with a TDS category:

  • Enter taxable value and GST as usual.
  • Versoll Books calculates TDS on the net amount.
  • The payable is reduced by the deducted amount.

Example Calculation

Bill Amount (excluding GST): ₹80,000
TDS Section 194J @ 10%
TDS Deducted: ₹8,000
Payable to Supplier: ₹72,000

Track TDS Payable and Filing

Use TDS reports to monitor liabilities and prepare for quarterly filings.

Step 5

Review TDS Payable Report

Open Reports > TDS Payable to see:

  • Section-wise deductions and totals
  • Suppliers with pending remittance
  • Monthly or quarterly deductions summary
Step 6

Record TDS Payment

Create a Payment entry to remit TDS to the government. Select the TDS payable account and the appropriate section.

When you clear the payable, Versoll Books automatically updates the supplier ledger to reflect the net amount paid.

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